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Renault-Nissan Boss Arrested for Financial Violations

Nissan Motor Co. Chairman Carlos Ghosn has been arrested over suspected financial violations, the NHK reported, and the carmaker said it will seek a removal of the industry icon as its chairman after an investigation into his alleged misconduct.
Ghosn, among the most prominent auto-industry leaders globally and also the CEO of Renault SA, was detained over a suspected breach of Japanese financial law, NHK reported.
Based on a whistleblower tip, Nissan has been doing an internal investigation over the past several months into suspected financial misconduct involving Ghosn and director Greg Kelly, the company said Monday. Nissan seeks to remove both Ghosn and Kelly, Bloomberg reported.
“The investigation showed that over many years both Ghosn and Kelly have been reporting compensation amounts in the Tokyo Stock Exchange securities report that were less than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn’s compensation,” Nissan said. “Also, in regards to Ghosn, numerous other significant acts of misconduct have been uncovered, such as personal use of company assets, and Kelly’s deep involvement has also been confirmed.”
Nissan said it has been providing information to the Japanese prosecutors and is cooperating fully with their investigation. Ghosn voluntarily went with Tokyo prosecutors, Asahi reported.
A spokesman for Renault declined to comment. Shares of the French carmaker fell as much as 15% in Paris, while Nissan global depository receipts sank more than 11%.

Engineer of 3-Way Union

Ghosn, 64, built the three-way union of Renault, Nissan and Mitsubishi Motors Corp. He said in September that he will continue to pare back his roles at the three individual companies, while continuing to head their alliance.
A spokesman for the France’s Finance Ministry declined to comment on the report. The country owns about 15% of Renault and supported Ghosn’s renewal at the helm of the French automaker.
Among the best paid executives in both Japan and France for several years, Ghosn’s compensation has regularly drawn criticism. Ghosn receives numerous paychecks in his multiple roles as chairman of the Renault-Nissan-Mitsubishi alliance, CEO of Renault, and chairman of both Nissan and Mitsubishi.
At Nissan, he was paid about 1.1 billion yen ($10 million) for 2016 and about $6.5 million in the most recent fiscal year. He took home about $8.5 million at Renault and about $2 million from Mitsubishi in the latest period. At Renault, his package for 2017 was narrowly passed by Renault shareholders, but only after he agreed a 20% reduction.
Ghosn's pay at the three alliance companies totaled about $17 million last year.